CareFlight Limited (a company limited by guarantee) ACN 003 093 445 ANNUAL FINANCIAL REPORT 30 APRIL 2013 CareFlight Limited 4-6 Barden Street Northmead NSW 2152
CareFlight Limited (a company limited by guarantee)
ACN 003 093 445
ANNUAL FINANCIAL REPORT 30 APRIL 2013
CareFlight Limited 4-6 Barden Street Northmead NSW 2152
CAREFLIGHT LIMITED DIRECTORS’ REPORT
Page 1
The directors present their report together with the financial report of CareFlight Limited (“CareFlight”) and of the Group, being CareFlight and its subsidiary, for the financial year ended 30 April 2013 and the Auditor’s report thereon.
1. Scale of operations
CareFlight is today a complex charitable organisation. We provide a range of aero-medical and related services to communities right across Australia and beyond our shores. The nature and diversity of those services are illustrated in the diagram below.
All of these services are delivered as part of, or in support of, CareFlight’s mission to “save lives, speed recovery and serve the community by providing the highest standard of rapid response critical care”.
But even as our organisation grows in scale and capability, we need to constantly assess our social impact: � What difference does CareFlight make to the communities we serve? � Are we improving the lives and life prospects of our patients?� Are we doing it as well as it can possibly be done, within the constraints of our role and resources?� Are we meeting or exceeding current best practice benchmarks?
2. Social Impact
Social impact can be defined as:
“The effect of an activity on the social fabric of the community and well being of the individuals and families”
Rarely, if ever, does one find a single objective measure of social impact in a not-for-profit sector organisation. Unlike the commercial sector, the not-for-profit sector does not have definitive and generally understood measures which can be mathematically calculated and reported to stakeholders, such as Total Shareholder Return and Return on Equity. Instead, not-for-profit organisations tend to look for indicators of social impact. In the aero-medical sector, we believe that the best indicators are:
� Number of patients treated and/or transported � Time to reach patients � Quality of care given to patients
CAREFLIGHT LIMITED DIRECTORS’ REPORT
Page 2
So what do those indicators suggest about CareFlight’s social impact?
Patient Numbers
Patient numbers over the last five years are shown in the chart below.
0
1,000
2,000
3,000
4,000
5,000
6,000
2009 2010 2011 2012 2013
Patient Numbers
Clearly, on the patient numbers dimension of social impact, CareFlight has done extremely well over the last five years. The substantial growth in patient numbers over this period is attributable to two new services provided by CareFlight:
� The Top End Medical Retrieval Service, where CareFlight provides the whole of the aeromedical service in the top half of the Northern Territory
� The NETS helicopter service, where CareFlight provides helicopter services to support the Neonatal and paediatric Emergency Transport Service (NETS)
Time to patient
Time to patient is a function of a number of factors, the two most important being:
� The speed, accuracy and efficiency of the tasking system (i.e. how quickly CareFlight is activated by the tasking authorities and briefed with the appropriate information regarding the whereabouts and condition of the patient)
� The speed and efficiency of the team activation process once the tasking instructions have been communicated to CareFlight (i.e. how long it takes CareFlight to get its team airborne)
CareFlight has little control over the first factor, so to measure our performance under the “time to patient” criterion we need to look at our contractual or internal Key Performance Indicators (KPIs), as they relate to team activation. These vary according to the nature of the service we provide. They are summarised in the table below:
CAREFLIGHT LIMITED DIRECTORS’ REPORT
Page 3
We regularly review and report against these KPIs. Apart from situations beyond our control (eg weather, flight control restrictions, awaiting specialist personnel supplied by third parties), CareFlight is overwhelmingly KPI compliant.
Accordingly, on the “time to patient” dimension of social impact, we think that there is a sound basis to conclude that CareFlight is doing well.
At an operational level, improving the “time to patient” dimension requires a process of continual improvement and refinement. Realistically, however, the best that CareFlight – and other aeromedical providers – can hope to achieve is modest, incremental improvement. The area that lends itself to further significant improvement is the tasking system: how information coming in via the ‘000’ system is captured and communicated to the aeromedical providers. Faster case identification and mission activation is the key to meaningful improvement in the “time to patient” dimension of social impact.
This area is essentially the domain of the tasking authorities. However, there are learnings from our recent Head Injury Retrieval Trial which, we believe, have the potential to materially improve the efficiency of the case identification and mission activation process. We are currently working with the tasking authorities to explore the practicality of introducing these learnings on a system wide basis.
Quality of care
Quality of patient care is extremely hard to measure. The best indicator of quality of patient care is likely to be the systemsand processes that go into building and supporting our medical teams. These are depicted in the diagram below:
CAREFLIGHT LIMITED DIRECTORS’ REPORT
Page 4
CareFlight invests heavily in all of these quality systems and processes. This investment is our best assurance that we are delivering the finest possible care to our patients.
3. Highlights of the year
The highlights of the year were:
� We treated and transported 5,039 patients (see table on page 2) � We were awarded the contract to provide helicopter services to NETS. � We implemented the final outstanding component of the Top End Medical Retrieval Service contract by bringing on-
line four near-new B200 King Air aircraft with modern ‘glass cockpit’ avionics technology. In preparation, our fixed wing pilots undertook extensive simulator training in Stockholm or Dubai.
� Darwin International Airport commenced construction of our new Darwin hangar. � The roll-out of our MediSim program which is taking vital trauma care training to regional, rural and remote
communities across Australia. � Our fundraising team had a record year, driven mainly by growth in corporate sponsorship and our regular giving and
our bequest programs.
CAREFLIGHT LIMITED DIRECTORS’ REPORT
Page 5
4. Financial Overview
The charts below provide a comparative snapshot of the revenue and surplus positions for each of the last five financial years of the organisation.
$0
$10,000,000
$20,000,000
$30,000,000
$40,000,000
$50,000,000
$60,000,000
$70,000,000
2009 2010 2011 2012 2013
Revenue
Capital grant from MAARevenue
$0
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
2009 2010 2011 2012 2013
Net surplus/(deficit)
Capital grant from MAASurplus
CAREFLIGHT LIMITED DIRECTORS’ REPORT
Page 6
Group revenue in FY2012-13 increased by $5,056,915 (8.5%), from $59,294,247 to $64,351,162. The increase in revenue was due principally to:- � increased flying operations under the Top End Aero Medical Services contract with the Northern Territory
Department of Health, � the commencement on 1 January 2013 of the NETS (Newborn and paediatric Emergency Transport Service)
contract which was awarded to CareFlight by the Ambulance Service of NSW and � an increase in donation and sponsorship revenue from our supporters.
Despite significant up-front costs incurred in the establishment of the NETS helicopter service, and higher than anticipated costs in transitioning the Top End Aero Medical Services operation from our legacy King Air aircraft (circa 1992/1993 vintage) to the later model King Air aircraft (circa 2006/2007 vintage), we achieved a very satisfactory net surplus of $859,439 (2012: $201,343).
5. Board and senior management changes
On 9 July 2012, Dr Sean Beehan resigned from his position as a CareFlight director after ten years’ service in that role. Sean’s resignation was prompted by a family illness and his need to devote as much time as possible to his family.
As a former flight doctor and Medical Director of CareFlight, Sean brought a medical perspective to the Board. He understood the operational detail of our medical service and ably represented the views of the CareFlight doctors at CareFlight Board meetings. At the same time, he was able to stand back and take a dispassionate view about what was in the organisation’s wider best interests. We thank him for his long and dedicated service to CareFlight and wish him and his family well.
Filling the gap left by Sean, Professor Danny Cass was appointed a Director of CareFlight on 4 February 2013. Danny is the Head of Trauma at the Children’s Hospital at Westmead. He has held the position of Director/Head of Trauma since 1985 and was appointed Professor at Sydney University in 1999. As well as clinical practice, Danny has been involved in the College of Surgeons as Chairman of the Trauma Committee from 2006 to 2010. He was CEO of the Institute of Trauma and Injury Management (NSW) from 2002 to 2009. He has been on the board of Kidsafe and is currently on the board of Royal Life Saving Society (NSW).
We also welcome Patricia Angus to the CareFlight Board. Trish has served with distinction in the Northern Territory Public Service predominantly as a senior executive in health and human services. She has qualifications in nursing, public administration and tropical health. Following her retirement, Trish was awarded the Public Service Medal in January 2013 for outstanding public service to health and housing policy, and programs and services to indigenous people in the Northern Territory. She is a member of the Top End Hospitals Network Governing Council. Trish was appointed a Director of CareFlight on 24 June 2013.
The only change at senior management level was that Jeff Konemann stepped down as Chief Pilot on 29 November 2012 and Richard Sandford was appointed in his place on the same day. The role of Chief Pilot is one of high regulatory responsibility and is extremely demanding. Jeff was keen to slow down the tempo of his work life and spend more time with his family. However, he continues to serve CareFlight in the role of Head of Fixed Wing Check and Training. He joins John Hoad (Chief Pilot from 1986 to 2006) to become the second Chief Pilot of CareFlight to continue in the service of the organisation after stepping down from the Chief Pilot role. The value to CareFlight of retaining the services of these experienced and talented aviators is immense.
Richard was promoted to Chief Pilot from his role as Fleet Manager Fixed Wing. He is a highly experienced fixed wing and rotary wing pilot, with experience in the military, commercial and emergency medical services sectors.
CAREFLIGHT LIMITED DIRECTORS’ REPORT
Page 7
6. Director details
The directors of the Company at any time during or since the end of the financial year are:
Name, qualifications and independence status Age Experience and special responsibilities
Patricia ANGUS PSM, MTH
Independent Non-Executive Director
66 � Extensive experience as a senior executive in the Northern Territory Public Service in health and housing policy, and programs and services to indigenous people
� Northern Territory resident director.
� Director since 24 June 2013.
Ian BADHAM OAM, BSc Media Relations ManagerExecutive Director
67 � Extensive experience in journalism and corporate administration and the development of civil helicopter rescue services in Australia since 1971.
� Northern Territory resident director.
� Director since 9 May 1986.
Sean BEEHAN MB, ChB, FANZCA Independent Non-Executive Director
55 � Specialist anaesthetist in public hospital system, private practice and retrieval medicine.
� Operational CareFlight crew doctor from 1989 till 2006.
� Former Medical Director of CareFlight.
� Appointed 18 July 2002.
� Resigned 9 July 2012.
David BOWEN BA, Dip Law Independent Non-Executive Director
56 � Extensive experience in the insurance industry and in government legal administration.
� Chief Executive Officer, National Disability Insurance Scheme Launch Transition Agency.
� Former Chief Executive Officer, Lifetime Care and Support Authority.
� Former General Manager, Motor Accidents Authority.
� Director since 18 December 2007.
Daniel CASS MBBS, FRCS, FRACS 63 � Experienced surgeon with extensive interests in injury prevention and post trauma management in a paediatric setting.
� Director of Trauma at the Children's Hospital, Westmead.
� Professor of Paediatric Surgery at the University of Sydney.
� Director since 4 February 2013.
Derek COLENBRANDER BA, LLBChief Executive Officer Executive Director
59 � Long career in private legal practice as a corporate and commercial lawyer, followed by general management experience.
� Solicitor and Notary Public.
� Director since 19 December 2003.
CAREFLIGHT LIMITED DIRECTORS’ REPORT
Page 8
Name, qualifications and independence status Age Experience and special responsibilities
Garry DINNIE BComm, FCA, FAICD,MIIA (Aust), FAIM Independent Non-Executive Director
61 � Extensive experience in financial and accounting matters, risk management and regulatory regimes with broad-based business experience across a number of industries.
� Former senior partner of a leading accounting firm.
� Director of various public and private companies.
� Chairman of the Audit & Risk Committee.
� Director since 23 February 2010.
Anna GUILLAN MBA Independent Non-Executive Director
54 � Extensive experience in sales and marketing in the tourism and hospitality industry.
� Executive General Manager Sales and Marketing at Hayman and Mulpha Hotels Australia.
� Member of the Audit & Risk Committee.
� Director since 14 December 2010.
Andrew REFSHAUGE MB, BS, FAICD ChairmanIndependent Non-Executive Director
64 � Extensive experience at the highest levels of government.
� Former Deputy Premier of NSW, former Treasurer and Minister for Health, Planning, Housing, Education, Training, State Development and Aboriginal Affairs.
� Former medical practitioner.
� Director and Chairman since 18 December 2007.
7. Directors' meetings
The number of directors’ meetings (including meetings of committees of directors) and number of meetings attended by each of the directors of the Company during the financial year are:
Board Audit & Risk Committee
Director Eligible to Attend Attended Eligible to Attend Attended
P Angus - - - -
I Badham 7 6 - -
S Beehan 2 - - -
D Bowen * 5 2 1 1
D Cass 2 - - -
D Colenbrander 7 7 - -
G Dinnie 7 7 2 2
A Guillan 7 6 2 2
A Refshauge 7 7 - -
* David Bowen has been granted leave of absence from 17 February to 31 December 2013.
8. Corporate governance statement
Board of Directors
The Company's Constitution provides for at least three directors and such greater number as the directors may determine. The Board currently comprises eight directors, six of whom are non-executive directors.
CAREFLIGHT LIMITED DIRECTORS’ REPORT
Page 9
Role of the Board
The Board:
� provides strategic leadership and direction for CareFlight � sets Management’s goals and approves the annual budget � progressively monitors and reviews the Company’s risk management strategies including the integrity of internal
control and management information systems.
The Board may, subject to the Corporations Act and CareFlight’s Constitution, delegate a range of functions, powers and duties to committees and Management.
The Board monitors and reviews the Company’s compliance with its statutory obligations, not only to meet the Company's legal obligations, but also to provide assurance to the thousands of generous CareFlight supporters that their decision to support CareFlight is making a difference in the community.
Chief Executive Officer
The Board appoints and monitors the performance of the Chief Executive Officer (CEO). The Board approves the terms of employment of the CEO.
The CEO is accountable to the Board for the management of CareFlight within the policy and delegated authority levels approved by the Board. The CEO's responsibilities include:
� advising the Board on strategic direction � ensuring business activities are in accordance with CareFlight's annual operating plan � keeping the Board informed of all major business proposals and developments through regular reports and � ensuring the Company conducts its affairs within the law.
Board processes
The Board meets at least six times a year and meets on an ad hoc basis to address specific significant matters. To assist in the execution of its responsibilities, the Board may establish committees. The Board has established the Audit & Risk Committee. Meetings attended by directors during the financial year are recorded in the Directors' Report.
Director education
The Company has a formal process to educate new directors about the nature of the business, current issues, corporate strategy and expectations concerning the performance of directors. Directors also have the opportunity to visit the Company’s operational bases and meet Management to gain a better understanding of the business.
Independent professional advice and access to company information
Each director has the right of access to all relevant Company information and to the Company’s executives. Subject to prior approval by the Board Chairman or committee chairman (as appropriate), the Board, an individual director or a committee may engage an independent external adviser, at the Company’s expense, in relation to any Board or committee matter.
Composition of the Board
The names of the directors in office at the date of this report are set out in the Directors’ Report. The Board is constitutedin accordance with the Company’s Constitution. The Board will comprise:
� a mix of people with a broad range of skills, qualifications and experience - reflecting the need for talent, commercial acumen and diversity ;
� at least one person with financial experience - reflecting the need for financial expertise; � at least one person with a medical background - reflecting the medical focus of CareFlight.
No director may retain office for more than three years without submitting for re-election. Any director, who, at the time he or she submits for re-election at an annual general meeting, has then held office for a continuous period of more than eight years, may only be re-elected by special resolution.
Remuneration policies
Subject to the qualification in the next paragraph, the non-executive directors serve in an honorary capacity and no remuneration is payable to them for their services as directors. They are however entitled to reimbursement of any out-of-
CAREFLIGHT LIMITED DIRECTORS’ REPORT
Page 10
pocket expenses incurred in the performance of their duties and responsibilities as directors.
The Chairman of the Board receives an allowance (Note 27 b)) in recognition of the time he commits to the affairs of the Company above and beyond the normal role of a board chairman. The Chairman of the Audit & Risk Committee receives an allowance (Note 27 b)) in recognition of the time he commits to the affairs of the Company above and beyond the normal role of chairman of a board committee. In addition two executive directors receive remuneration in their roles as salaried officers. In accordance with the requirements of the NSW Charitable Fundraising Act 1991, these arrangements have been approved by:
� the Minister for Gaming & Racing under Section 48 of the Act; � the CareFlight Board which approved the remuneration packages as being on reasonable commercial terms; � a meeting of Members which confirmed the appointments, conditions of service and remuneration of the two
executive directors; � a meeting of Members which confirmed the allowances paid to the Chairman of the Board and the Chairman of the
Audit & Risk Committee.
The Board considers the remuneration of the CEO and senior management and agrees the broad bands of salary levels for staff in general. The Board may obtain independent advice on the appropriate level of remuneration packages.
Audit & Risk Committee
The primary function of the Audit & Risk Committee is to assist the Board in fulfilling its responsibilities by reviewing the financial information to be provided to Members and other stakeholders and assessing the adequacy of internal control systems, accounting policies and the audit process. The Committee comprises three directors, all of whom are non-executive directors.
The names of the directors who were members of the Audit & Risk Committee during the year are set out in the Directors’ Report. The Committee met on two occasions during the year and Committee members’ attendance is recorded in the Directors’ Report.
The Group’s external Auditor, the CEO and the Finance Manager are invited to Committee meetings at the discretion of the Committee.
Risk management
The Board considers that risk management and compliance underpin sound management and that oversight of these matters is an important responsibility of the Board. The Company has developed a risk management plan which has been approved by the Board. The plan identifies the Company's key strategic, operational, legal, reputational and financial risks and provides a framework for the periodic review and assessment of these risks.
The Board requires the CEO and the Finance Manager to provide certification that the Company's financial reports are based on a sound system of risk management and internal control. From a risk management perspective this certification is supported by:
� the financial, operational and strategic reporting which occurs in the context of the Board papers and Board meetings � the annual audit conducted by the Company’s external Auditor � the review function of the Audit & Risk Committee and � the periodic assessment by the Board of the risks identified in the risk management plan.
Communication with Members
The principal avenues of communication with Members are through the monthly CareFlighter newsletter, quarterly newsletter to supporters and the Company website (www.careflight.org). Prior to and for purposes of the annual general meeting, the Company distributes to Members:
� the Annual Report for the Company which includes summarised financial statements and� the audited financial statements of the Company.
The external Auditor attends the annual general meeting of Members to answer questions concerning the conduct of the audit, the preparation and content of the Auditor's report, accounting policies adopted by the Company and the independence of the Auditor in relation to the conduct of the audit.
Ethical standards
Directors and employees are expected to act with the highest ethical standards, having regard to CareFlight’s mission and values, its charitable status and its community service ethos.
CAREFLIGHT LIMITED DIRECTORS’ REPORT
Page 11
Conflict of interests
Directors are required to keep the Board advised on an ongoing basis of any interest that could potentially conflict with those of the Company. Subject to the Corporations Act and the Constitution, directors are required to absent themselves from directors’ meetings where matters in which directors have a material personal interest are to be considered.
Code of conduct
The Board has approved a code of conduct that requires employees to conduct themselves ethically, with integrity and in a professional manner so as to achieve the highest standards of behaviour.
The Board supports and observes the Code of Conduct for Directors issued by the Australian Institute of Company Directors.
9. Dividends
No portion of the income of the Company has been paid or can be paid by way of dividend to the Members under the Constitution of the Company.
10. Indemnification and insurance of officers
The Company has provided for and paid premiums totalling $12,980 during the year for Directors and Officers Liability Insurance. The insurance is in respect of legal liability for damages and legal costs arising from claims made by reason of any acts or omissions (other than dishonesty) by directors and officers, while acting in their individual or collective capacity as directors or officers of the Company.
11. Lead auditor’s independence declaration
The lead auditor’s independence declaration is set out on page 49 and forms part of the Directors’ Report for the financial year 2013.
12. Events subsequent to reporting date
There has not arisen in the interval between the end of the financial year and the date of this report any item, transaction or event of a material or unusual nature likely, in the opinion of the directors of the Company, to affect significantly the operations of the Company, the results of those operations, or the state of affairs of the Company, in future financial years.
13. The year ahead
In April 2013 the Board approved a new three year Strategic Plan for CareFlight. That plan has five pillars:
� People, Quality and Safety � Customer Focus and Service Excellence � Financial Strength � Brand Management and Fundraising � Business Development
We have set ourselves some ambitious targets. Our aim is to harness the energy, passion and talent of our team to replicate the successes of the last few years, bring the CareFlight service to more people and lift our social impact across Australia and our region.
CAREFLIGHT LIMITED
Page 13
Consolidated statement of surplus or deficit and other comprehensive income for the year ended 30 April 2013 Consolidated
Note 2013$
2012$
(Restated)*Ambulance Service of NSW 6,375,333 3,200,558 Northern Territory Department of Health 31,355,803 28,086,819 Aero-medical and other retrieval revenue 12,716,848 15,076,526 Fundraising - donations and sponsorship 32 6,639,182 5,299,290 Fundraising - merchandising and events 32 7,263,996 7,631,054
Total revenue 64,351,162 59,294,247
Operations and administration - costs of personnel 29,597,027 24,998,561 Direct costs of medical and aircraft retrieval 17,492,611 20,200,015 Costs of fundraising - donations and sponsorship 32 982,939 697,626 Costs of fundraising - merchandising and events 32 5,038,670 5,467,445 Depreciation 14, 15, 16, 17 3,355,110 2,187,610 Insurance 962,601 649,690 Professional fees 1,520,487 1,730,954 General overheads 2,705,269 2,458,008 Net loss on sale of non-current assets 162,504 14,362 Impairment loss on non-current assets 15,508 - Impairment loss on fixed wing aircraft held for sale 12,14 411,694 -
Total expenditure before devaluation 62,244,420 58,404,271
Surplus before net finance and revaluation of aircraft 2,106,742 889,976
Finance income 6 122,384 158,318 Finance expense 6 (1,369,687) (846,951)
Net finance expense (1,247,303) (688,633)
Net surplus for the year 859,439 201,343
Other comprehensive income
Revaluation/(devaluation) of rotary wing aircraft 3 d) (v), 15 234,290 (697,892)
Total comprehensive income for the year 1,093,729 (496,549)
The notes on pages 17 to 47 are an integral part of these financial statements.
* In 2013 the Group adopted the cost basis for valuing fixed wing aircraft to reflect the long-term nature of these assets whichare held to service the Group’s commitments to the Northern Territory Government (refer Note 3 d) (v)). Prior year comparatives and accompanying notes have been restated to reflect this change in policy.
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CAREFLIGHT LIMITED
Page 15
Statement of financial position Consolidated as at 30 April 2013
Note 2013 2012 $ $
(Restated)*Current assets Cash and cash equivalents 8 3,467,054 6,246,432 Trade and other receivables 9 7,447,385 2,505,260 Inventories 10 231,211 195,042 Investments 11 1 1 Fixed wing aircraft held for sale 12 766,782 - Other current assets 13 1,019,631 612,073
Total current assets 12,932,064 9,558,808
Non-current assetsFixed wing aircraft 14 22,831,259 21,401,088 Rotary wing aircraft 15 4,834,680 4,962,038 Land and buildings 16 2,539,613 2,609,156 Property, plant and equipment 17 5,426,550 4,947,994
Total non-current assets 35,632,102 33,920,276
Total assets 48,564,166 43,479,084
Current liabilities Trade and other payables 18 9,631,277 9,140,555 Interest bearing liabilities 19 4,901,106 2,466,004 Provisions 20 2,009,621 1,698,863
Total current liabilities 16,542,004 13,305,422
Non-current liabilitiesInterest bearing liabilities 19 23,758,566 23,083,736 Provisions 20 353,191 273,250
Total non-current liabilities 24,111,757 23,356,986
Total liabilities 40,653,761 36,662,408
Net assets 7,910,405 6,816,676
Capital fundsReserves 21 234,290 - Retained surplus 22 7,676,115 6,816,676
Total capital funds 7,910,405 6,816,676
The notes on pages 17 to 47 are an integral part of these financial statements.
CAREFLIGHT LIMITED
Page 16
Statement of cash flows Consolidated for the year ended 30 April 2013
Note 2013 2012 $ $
Cash flows from operating activities
Cash receipts in the course of operations 64,995,992 67,066,896 Cash payments in the course of operations (63,448,865) (59,428,171)Finance income 6 122,384 158,318 Finance expense 6 (1,369,687) (846,951)
Net cash from/(used in) operating activities 25 299,824 6,950,092
Cash flows from investing activities
Acquisition of non-current assets 14,15,16,17 (7,673,372) (25,180,199) Proceeds from sale of non-current assets 1,525,186 239,617 Expenses incurred in disposing of non-current assets (40,948) -
Net cash from/(used in) investing activities (6,189,134) (24,940,582)
Cash flows from financing activities
Net finance lease payments 3,109,932 20,676,440
Net cash from/(used in) financing activities 3,109,932 20,676,440
Net increase/(decrease) in cash held (2,779,378) 2,685,950
Cash and cash equivalents at 1 May 6,246,432 3,560,482
Cash and cash equivalents at 30 April 8 3,467,054 6,246,432
The notes on pages 17 to 47 are an integral part of these financial statements.
CAREFLIGHT LIMITED
Page 17
Notes to financial statements
1. Reporting entity
CareFlight Limited (the ‘Company’) is a company domiciled in Australia. The address of the Company’s registered office is 4-6 Barden Street, Northmead, NSW 2152. The consolidated financial statements of the Group as at and for the year ended 30 April 2013 comprise the Company and its subsidiary CareFlight (NT) Limited (together referred to as the ‘Group’ and individually as ‘Group entities’). The Company is a registered charity and a Public Benevolent Institution. The principal activity of the Group is the provision of rapid response critical care services. The Group is limited by guarantee.
In the event of the Company being wound up, a member's liability for the Company's debts and liabilities, costs, charges and expenses of winding up and adjustment of the rights of the contributories among themselves, is limited to an amount as may be required, not exceeding ten dollars ($10.00). Members are liable on the above basis up to one year after they cease to be Members.
At 30 April 2013, the Company had 27 Members (2012: 26), seven (2012: seven) of whom were directors of the Company.
2. Basis of preparation
a) Statement of compliance
The financial statements are a general purpose financial report which has been prepared in accordance with Australian Accounting Standards (AAS) adopted by the Australian Accounting Standards Board (AASB) and the Corporations Act 2001. The consolidated financial statements of the Group comply with the Australian equivalents of the International Financial Reporting Standards (AIFRS) and interpretations adopted by the International Accounting Standards Board (IASB).
The consolidated financial statements were authorised for issue by the Board of Directors on 24 June 2013.
b) Basis of measurement
The consolidated financial statements are prepared on the historical cost basis except for rotary wing aircraft, which are stated at their fair values.
c) Functional and presentation currency
The consolidated financial statements are presented in Australian dollars, which is the Group’s functional currency.
d) Use of estimates and judgements
The preparation of the financial statements in conformity with AIFRS requires Management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected.
Information about assumption and estimation uncertainties that have a significant risk of resulting in a material adjustment within the next financial year is included in the following notes:
� Note 15 – valuation of rotary wing aircraft � Note 20 – provisions � Note 23 – valuation of financial instruments � Note 24 – accounting for an arrangement containing a lease
e) Changes in accounting policies
From 1 May 2012 the Group applied amendments to AASB 101 Presentation of Financial Statements outlined in AASB 2011-9 Amendments to Australian Accounting Standards – Presentation of Items of Other Comprehensive Income. The change in accounting policy only relates to disclosures and had no impact on net surplus for the year.
In 2013 the Group decided to adopt the cost basis for valuing fixed wing aircraft to reflect the long-term nature of these assets which are held to service the Group’s commitments to the Northern Territory Government (refer Note 3 d) (v)).
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2. Basis of preparation (continued)
f) Going concern
The financial report has been prepared on a going concern basis which contemplates continuity of normal business activities, the realisation of assets and settlement of liabilities in the ordinary course of business. In the year ended 30 April 2013, the Company reported a surplus of $859,439 and generated cash of $299,824. At year end, current liabilities exceeded current assets by $3,609,940. Included in current liabilities are:-
� deferred revenue of $4,521,109, which in the normal course of business will be recognised as revenue in accordance with the terms and conditions of the Company’s contract with Northern Territory Government and
� the residual lease liability of $1,692,578 to Westpac Banking Corporation in respect of the BK117 helicopter VH-IME. The lease on this aircraft will expire on 29 December 2013 and will be refinanced or repaid by that date.The Directors note that the value of this aircraft at 30 April 2013 is $2,720,000 and, in the event long term refinancing is not be possible or is not required, the Company has sufficient equity in the aircraft to facilitate the full repayment of the debt.
In view of the Company’s history of generating surpluses, the overall net asset position of $7,910,405 and the favourable cashflow projection, the Board considers it is appropriate to prepare the financial report on a going concern basis.
g) Removal of parent entity financial statements
The Group has applied amendments to the Corporations Act (2001) that remove the requirement for the Group to lodge parent entity financial statements. Parent entity financial statements have been replaced by the specific parent entity disclosures in Note 36.
h) Environmental regulation
The Group’s operations are not subject to any significant environmental regulations under either Commonwealth or State legislation. However, the Board believes that the Group has adequate systems in place for the management of its environmental requirements and is not aware of any breach of those environmental requirements as they apply to the Group.
3. Statement of significant accounting policies
The accounting policies set out below have been applied consistently to all periods presented in these consolidated financial statements, and have been applied consistently by Group entities.
a) Basis of consolidation
(i) Subsidiaries
A subsidiary is an entity controlled by the Company. Control exists when the Company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. The financial statements of the subsidiary are included in the consolidated financial statements from the date of incorporation. The accounting policies of the subsidiary have been changed when necessary to align them with the policies adopted by the Company. In the Company’s financial statements, investment in the subsidiary is carried at cost.
(ii) Transactions eliminated on consolidation
Intra-group balances and any unrealised income and expenses arising from intra-group transactions are eliminated in preparing the consolidated financial statements.
b) Foreign currency transactions
Transactions in foreign currencies are translated to the functional currency of the Group at exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are retranslated to the functional currency at the exchange rate at that date. The foreign currency gain or loss on monetary items is the difference between amortised cost in the functional currency at the beginning of the period, adjusted for effective interest and payments during the period, and the amortised cost in foreign currency translated at the exchange rate at the end of the year.
Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated to the functional currency at the exchange rate at the date that the fair value was determined. Foreign currency differences arising on retranslation are recognised in the statement of surplus or deficit and other comprehensive
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income.3. Statement of significant accounting policies (continued)
c) Financial instruments
(i) Non-derivative financial assets
Non-derivative financial assets comprise investments in trade and other receivables, cash and cash equivalents.
The Group initially recognises loans and receivables and deposits on the date that they are originated. All other financial assets (including assets designated at fair value through the statement of surplus or deficit and other comprehensive income) are recognised initially on the trade date at which the Group becomes a party to the contractual provisions of the instrument.
The Group derecognises a financial asset when the contractual rights to the cash flows from the asset expire or it transfers the rights to receive the contractual cash flows on the financial asset in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred. Any interest in transferred financial assets that is created or retained by the Group is recognised as a separate asset or liability.
Financial assets and liabilities are offset and the net amount presented in the statement of financial position when, and only when, the Group has a legal right to offset the amounts and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.
Cash and cash equivalents comprise cash balances and call deposits with original maturities of three months or less.
(ii) Non-derivative financial liabilities
The Group initially recognises debt securities issued and subordinated liabilities on the date that they are originated. All other financial liabilities (including liabilities designated at fair value through the statement of surplus or deficit and other comprehensive income) are recognised initially on the trade date at which the Group becomes a party to the contractual provisions of the instrument.
The Group derecognises a financial liability when its contractual obligations are discharged or cancelled or expire.
Financial assets and liabilities are offset and the net amount presented in the statement of financial position when, and only when, the Group has a legal right to offset the amounts and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.
The Group has the following non-derivative financial liabilities: loans and borrowings, trade and other payables.
Bank overdrafts that are repayable on demand and form an integral part of the Group’s cash management are included as a component of cash and cash equivalents for the purpose of the statement of cash flows.
d) Property, plant and equipment
(i) Recognition and measurement
Items of property, plant and equipment except rotary wing aircraft (refer Note 3 d) (v)) are stated at cost or deemed cost less accumulated depreciation and accumulated impairment losses (refer Note 3 g)).
Cost includes expenditure that is directly attributable to the acquisition of the asset. When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.
Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the proceeds from disposal with the carrying amount of property, plant and equipment and are recognised net within the statement of surplus or deficit and other comprehensive income. When revalued assets are sold, the amounts included in the revaluation reserve are transferred to retained surplus.
(ii) Subsequent costs
The cost of replacing a component of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied within the component will flow to the Group and its costs can be measured reliably. The carrying amount of the replaced part is derecognised. The costs of the day-to-day servicing of property, plant and equipment are recognised in the statement of surplus or
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deficit and other comprehensive income as incurred. 3. Statement of significant accounting policies (continued)
d) Property, plant and equipment (continued)
(iii) Depreciation
Depreciation is based on the cost of an asset less its residual value. Significant components of individual assets are assessed and if a component has a useful life that is different from the remainder of that asset, that component is depreciated separately.
Depreciation is recognised in the statement of surplus or deficit and other comprehensive income on a straight-line basis over the estimated useful life of each component of an item of property, plant and equipment. Leased assets are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that the Group will obtain ownership by the end of the lease term. Land is not depreciated.
During the year, the Group reviewed the method of depreciating fixed wing aircraft, which resulted in disaggregating the fixed wing aircraft into airframe and engine components due to differing useful lives between the two components and depreciating separately. The rate of depreciation of fixed wing engines was revised to be based on the expected reduction in the service capacity. There was no change to the treatment of rotary wing aircraft.
The estimated useful lives for the current and comparative years are as follows: 2013 2012 Fixed wing aircraft - Airframe - Engines Rotary wing aircraft
10 to 18 years 5,000 hours 20 years
10 to 18 years 10 to 18 years 20 years
Buildings 40 years 40 years Other plant and equipment – owned and leased 2.5 to 10 years 2.5 to 10 years Hangars 40 years 40 years
Opening balances of fixed wing airframes and engines held as non-current assets at year end have been re-stated in accordance with the revised depreciation rates for these asset classes.
Depreciation methods, useful lives and residual values are reviewed upon each reporting date and adjusted if appropriate.
(iv) Hangar facilities, plant and equipment
The Group has adopted the cost basis for the hangar facilities at Westmead and for plant and equipment.
(v) Aircraft
Fixed Wing
During the year, the Group reviewed its policy for valuing fixed wing aircraft. Prior to 1 May 2012 fixed wing and rotary wing aircraft were stated at fair values, as determined on the international market. As these values are determined in US dollars they may fluctuate significantly from year to year.
In 2013 the Group decided to adopt the cost basis for valuing fixed wing aircraft to reflect the long-term nature of these assets which are held to service the Group’s commitments to the Northern Territory Government.
The impact of the change in accounting policy is shown in Note 14 which has been recast to reflect adjusted carrying values of fixed wing aircraft as at 30 April 2012. The net revaluation increment of $697,892 recognised in prior years has been written back to retained earnings and asset revaluation reserve. Current and comparative amounts have been re-stated in accordance with the new accounting policy.
Rotary Wing
The Group decided to continue to apply the fair value basis of valuation for rotary wing aircraft, recognising that these values are determined on the international market in US dollars and as such, may fluctuate from year to year.
Revaluation increments on a class of asset basis are recognised in the asset revaluation reserve except to the extent that this reverses an impairment loss which had previously been recognised in the statement of surplus or deficit and other comprehensive income, in which case the reversal of that impairment loss is also recognised in the statement of surplus or deficit and other comprehensive income. Revaluation decrements are only offset against revaluation increments relating to the same class of asset and any excess is recognised firstly against
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the balance of the corresponding asset revaluation reserve. If this reserve is exhausted then the balance is charged directly to the statement of surplus or deficit and other comprehensive income.
3. Statement of significant accounting policies (continued)
e) Leased assets
Leases in terms of which the Group assumes substantially all the risks and rewards of ownership are classified as finance leases. Upon initial recognition the leased asset is measured at an amount equal to the lower of its fair value and the present value of the minimum lease payments. Subsequent to initial recognition, the asset is accounted for in accordance with the accounting policy applicable to that asset.
Other leases are operating leases and are not recognised in the Group’s statement of financial position.
f) Inventories
Inventories are stated at the lower of cost and net realisable value. The cost of inventories is based on the first-in- first-out principle and includes expenditure incurred in acquiring the inventories and other costs incurred in bringing them to their existing location and condition. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses.
g) Impairment
(i) Financial assets
A financial asset not carried at fair value is assessed at each reporting date to determine whether there is objective evidence that it is impaired. A financial asset is impaired if objective evidence indicates that a loss event has occurred after the initial recognition of the asset and the loss event has had a negative effect on the estimated future cash flows of that asset that can be estimated reliably.
The Group considers evidence of impairment for receivables and held-to-maturity investment securities at both a specific asset and collective level. All individually significant receivables and held-to-maturity investment securities are assessed for specific impairment. All individually significant receivables and held-to-maturity investment securities found not to be specifically impaired are then collectively assessed for any impairment that has been incurred but not yet identified. Receivables and held-to-maturity investment securities that are not individually significant are collectively assessed for impairment by grouping together receivables and held-to-maturity investment securities with similar risk characteristics.
In assessing collective impairment the Group uses historical trends of the probability of default, timing of recoveries and the amount of loss incurred, adjusted for Management’s judgement as to whether current economic and credit conditions are such that the actual losses are likely to be greater or less than suggested by historical trends.
An impairment loss in respect of a financial asset measured at amortised costs is calculated as the difference between its carrying amount and the present value of the estimated future cash flows discounted at the original effective interest rate. Losses are recognised in the statement of surplus or deficit and other comprehensive income and reflected in an allowance account against loans and receivables or held-to-maturity investment securities. Interest on the impaired asset continues to be recognised. When a subsequent event (e.g. repayment by the debtor) causes the amount of impairment loss to decrease, the decrease in impairment loss is reversed through the statement of surplus or deficit and other comprehensive income.
All impairment losses are recognised in the statement of surplus or deficit and other comprehensive income. An impairment loss is reversed if the reversal can be related objectively to an event occurring after the impairment loss was recognised. For financial assets measured at amortised costs and available-for-sale financial assets that are debt securities, the reversal is recognised in the statement of surplus or deficit and other comprehensive income.
(ii) Non-financial assets
The carrying amounts of the Group’s non-financial assets are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists then the asset’s recoverable amount is estimated. An impairment loss is recognised if the carrying amount of an asset exceeds its recoverable amount.
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3. Statement of significant accounting policies (continued)
h) Employee benefits
(i) Wages, salaries, annual leave and sick leave
Liabilities for employee benefits for wages, salaries, annual leave and sick leave that are expected to be settled within 12 months of the reporting date represent present obligations resulting from employees’ services provided up to the reporting date. The liabilities are calculated at undiscounted amounts based upon remuneration wage and salary rates that the Group expects to pay as at reporting date including related on-costs, such as workers compensation insurance.
Non-accumulating non-monetary benefits, such as medical care, housing, cars and free or subsidised goods and services, are expensed based on the net marginal cost to the Group as the benefits are taken by the employees.
(ii) Superannuation
The Group contributes to employee superannuation funds. Contributions are charged against income as they are incurred. Obligations for superannuation contributions are recognised as a personnel expense in the statement of surplus or deficit and other comprehensive income when they are incurred.
(iii) Long service leave
The Group’s net obligation in respect of long-term service benefits, other than defined benefit plans, is the amount of future benefit that employees have earned in return for their service in the current and prior periods. The obligation is calculated using expected future increases in wage and salary rates including related on-costs and expected settlement dates, and is discounted using the rates attached to the Commonwealth Government bonds at the reporting date which have maturity dates approximating the terms of the Group’s obligations.
i) Revenue
(i) Revenue from goods sold and services rendered
Revenue from the sale of goods is measured at the fair value of the consideration received or receivable, net of returns, trade discounts and volume rebates. Revenue is recognised when persuasive evidence exists, usually in the form of an executed sales agreement, that the significant risks and rewards of ownership have been transferred to the customer, recovery of the consideration is probable, the associated costs and possible return of goods can be estimated reliably, there is no continuing management involvement with the goods and the amount of revenue can be measured reliably. If it is probable that discounts will be granted and the amounts can be measured reliably, then the discounts are recognised as a reduction of revenue as the sales are recognised.
Revenue from services rendered is recognised in the statement of surplus or deficit and other comprehensive income in proportion to the stage of completion of the transaction at the reporting date. The stage of completion is assessed by reference to surveys of work performed.
(ii) Government grants
Recurrent Government grants and capital grants are recognised initially as deferred income at fair value when there is reasonable assurance that they will be received and the Group will comply with the conditions associated with the grant and are then recognised in the statement of surplus or deficit and other comprehensive income. Grants that compensate the Group for expenses incurred are recognised as revenue in the statement of surplus or deficit and other comprehensive income on a systematic basis in the same periods in which the expenses are incurred.
(iii) Donation revenue
Donation revenue is brought to account in the period in which it is received.
(iv) Donations of fixed assets
All assets donated to the Group are initially recorded at fair value at the date of acquisition, being the estimated net realisable value of the assets at the date the assets are donated to the Group. This value is recognised as a donation in the statement of surplus or deficit and other comprehensive income.
(v) Donations in kind
Donations in kind occur from time to time as part of major capital projects. These are recorded as revenue from fundraising in the statement of surplus or deficit and other comprehensive income at fair value, with an equal
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amount being capitalised to the fixed asset to which they relate. 3. Statement of significant accounting policies (continued)
i) Revenue (continued)
(vi) Insurance cost recoveries
Claims raised on insurance companies for cost recovery on missions are treated as income when funds are received, since the Group is unable to determine with any degree of certainty whether the claim submitted by the injured party will be successful.
(vii) Aero-medical and other retrieval revenue
Aero-medical and other retrieval revenue is recognised in the statement of surplus or deficit and other comprehensive income when services are provided.
j) Lease payments
(i) Operating lease payments
Payments made under operating leases are recognised in the statement of surplus or deficit and other comprehensive income on a straight-line basis over the term of the lease.
(ii) Finance lease payments
Minimum lease payments made under finance leases are apportioned between the finance charge and the reduction of the outstanding liability. The finance expense is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability.
k) Finance income and expense
Finance income and expense comprise interest payable on capitalised leases calculated using the effective interest method, interest receivable on funds invested and foreign exchange gains and losses.
Interest income is recognised in the statement of surplus or deficit and other comprehensive income as it accrues, using the effective interest method. The interest expense component of finance lease payments is recognised in the statement of surplus or deficit and other comprehensive income using the effective interest method. Finance expense comprises interest expense on borrowings, foreign currency loss and impairment losses recognised on financial assets. All borrowing costs are recognised in the statement of surplus or deficit and other comprehensive income using the effective interest method. Foreign currency gains and losses are reported on a net basis.
l) Goods and services tax
Revenue, expenditure and assets are recognised net of the amount of goods and services tax (GST), except where the amount of GST incurred is not recoverable from the Australian Taxation Office (ATO). In these circumstances, the GST is recognised as part of the cost of acquisition of the asset or as part of the expense.
Receivables and payables are stated with the amount of GST included. The net amount of GST recoverable from, or payable to, the ATO is included as a current asset or liability in the statement of financial position.
Cash flows are included in the statement of cash flows on a gross basis. The GST components of cash flows arising from investing and financing activities which are recoverable from, or payable to, the ATO are classified as operating cash flows.
m) Income tax
The Group is a Public Benevolent Institution and is exempt from income tax under Subdivision 50-B of the Income Tax Assessment Act 1997.
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3. Statement of significant accounting policies (continued)
n) New standards and interpretations not yet adopted
A number of new standards, amendments to standards and interpretations are effective for annual periods beginning after 1 May 2013 and have not been applied in preparing these financial statements. None of these is expected to have a significant effect on the financial statements of the Company.
(i) AASB 9 Financial Instruments (2010), AASB 9 Financial Instruments (2009)
AASB 9 (2009) introduces new requirements for the classification and measurement of financial instruments. Under AASB 9 (2009) financial assets are classified and measured based on the business model in which they are held and the characteristics of their contractual cash flow. AASB 9 (2010) introduces additional requirements relating to financial liabilities. The IASB currently has an active project that may result in limited amendments to the classification and measurement requirements of AASB 9 and add new requirements to address the impairment of financial assets and hedge accounting.
AASB 9 (2010 and 2009) are effective for annual periods beginning on or after 1 January 2015 with early adoption permitted. The adoption of AASB 9 (2010) is expected to have an impact on the Group’s financial assets, but no impact on the Group’s financial liabilities.
(ii) AASB 10 Consolidated Financial Statements, AASB 11 Joint Arrangements, AASB 12 Disclosure of Interests in Other Entities (2011)
AASB 10 introduces a single control model to determine whether an investee should be consolidated. As a result, the Group may need to change its consolidation conclusion in respect of its investees, which may lead to changes in the current accounting for these investees.
Under AASB 11, the structure of the joint arrangement, although still an important consideration, is no longer the main factor in determining the type of joint arrangement and therefore the subsequent accounting.
� The Group’s interest in a joint operation, which is an arrangement in which the parties have rights to the assets and obligations for the liabilities, will be accounted for on the basis of the Group’s interest in those assets and liabilities.
� The Group’s interest in a joint venture, which is an arrangement in which the parties have rights to the net assets, will be equity accounted.
The Group may need to reclassify its joint arrangements, which may lead to changes in current accounting for these interests.
AASB 12 brings together into a single standard all the disclosure requirements about an entity’s interests in subsidiaries, joint arrangements, associates and unconsolidated structured entities. The Group is currently assessing the disclosure requirements for interests in subsidiaries, interests in joint arrangements and associates and unconsolidated structured entities in comparison with the existing disclosures. AASB 12 requires the disclosure of information about the nature, risks and financial effects of these interests.
These standards are effective for annual periods beginning on or after 1 January 2013 with early adoption permitted.
(iii) AASB 13 Fair Value Measurement (2011)
AASB 13 provides a single source of guidance on how fair value is measured and replaces the fair value measurement guidance that is currently dispersed throughout Australian Accounting Standards. Subject to limited exceptions, AASB 13 is applied when fair value measurements or disclosures are required or permitted by other AASBs. The Group is currently reviewing its methodologies in determining fair values. AASB 13 is effective for annual periods beginning on or after 1 January 2013 with early adoption permitted.
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4. Determination of fair values
A number of the Group’s accounting policies and disclosures require the determination of fair value for both financial and non-financial assets and liabilities. Fair values have been determined for measurement and/or disclosure purposes based on the following methods. Where applicable, further information about the assumptions made in determining fair values is disclosed in the notes specific to that asset or liability.
a) Rotary wing aircraft
The fair value of rotary wing aircraft is based on market values. The market value of each aircraft is the estimated amount for which an aircraft could be exchanged on the date of valuation between a willing buyer and a willing seller in such an arm’s length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion.
b) Inventories
Inventories are stated at the lower of cost and net realisable value. The cost of inventories is based on the first-in-first-out principle and includes expenditure incurred in acquiring the inventories and other costs incurred in bringing them to their existing location and condition Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and selling expenses.
c) Trade and other receivables
The fair value of trade and other receivables is estimated as the present value of future cash flows, discounted at the market rate of interest at the reporting date.
d) Non-derivative financial liabilities
Fair value, which is determined for disclosure purposes, is calculated based on the present value of future principal and interest cash flows discounted at the market rate of interest at the reporting date. For finance leases the market rate of interest is determined by reference to similar lease agreements.
5. Financial risk management
The Group has exposure to the following risks from its use of financial instruments: � Credit risk � Liquidity risk � Market risk
This note presents information about the Group’s exposure to each of the above risks, the Group’s objectives, policies and processes for measuring and managing risk and the management of capital. Further quantitative disclosures are included throughout this financial report.
The Board has overall responsibility for the establishment and oversight of the Group’s risk management framework.
The Group’s risk management policies are established to identify and analyse the risks faced by the Group, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Group’s activities. The Group, through its training and management standards and procedures, aims to develop a disciplined and constructive control environment in which all employees understand their roles and obligations.
The Audit & Risk Committee oversees how Management monitors compliance with the Group’s risk management policies and procedures and reviews the adequacy of the risk management framework in relation to the risks faced by the Group.
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5. Financial risk management (continued)
a) Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations and arises principally from the Group’s receivables from customers.
Trade and other receivables
The Group’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. However, Management also considers the demographics of the Group’s customer base, including the default risk of the industry and country in which customers operate, as these factors have an influence on credit risk.
More than 85% of the Group’s customers have been transacting with the Group for over many years and no impairment loss has been recognised against these customers. In monitoring customer credit risk, customers are grouped according to their credit characteristics, including whether they are an individual or legal entity, geographic location, aging profile, maturity and existence of previous financial difficulties.
b) Liquidity risk
Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Group’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group’s reputation.
The Group closely monitors its cash flow requirements to optimise its cash return on investments. Typically the Group aims to ensure that it has sufficient cash on demand to meet expected operational expenses for a period of 60 days, including the servicing of financial obligations; this excludes the potential impact of extreme circumstances that cannot reasonably be predicted, such as natural disasters.
c) Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the Group’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.
Currency risk The Group is exposed to currency risk on purchases, borrowings and aircraft acquisitions and disposals that are denominated in a currency other than the functional currency of the Group being Australian dollars (AUD). The currency in which these transactions primarily are denominated is United States dollars (USD).
Interest rate risk The Group adopts a policy of ensuring that its exposure to changes in interest rates on borrowings is on a fixed rate basis.
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Consolidated
2013 2012Note $ $
6. Net finance income and expense Interest income 117,701 59,504
Foreign currency gain 4,683 98,814 Finance income 122,384 158,318
Finance charges (1,369,687) (834,943) Foreign currency loss - (12,008) Finance expense (1,369,687) (846,951) Net finance expense 1,247,303 688,633
7. Auditor’s remuneration
Audit services Auditor of the Company – KPMG Australia 110,716 93,214
Services other than statutory audit Advisory and professional services – KPMG Australia
- 48,420
110,716 141,634
8. Cash and cash equivalents Cash on hand 14,757 19,629 Cash at bank – unrestricted 3,338,797 4,791,419 Cash at bank – restricted 113,500 1,435,384
3,467,054 6,246,432
9. Trade and other receivables
Trade debtors 6,262,765 2,084,147 Other trade receivables 1,184,620 421,113
7,447,385 2,505,260
The Group’s exposure to credit risk related to receivables is discussed in Note 23.
10. Inventories Bear stock at cost 207,743 189,598 Fuel stock at cost 23,468 5,444 231,211 195,042
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Consolidated Note 2013 2012
$ $ 11. Investments
Share in CareFlight Australia Limited 11 a) 1 1
1 1
a) CareFlight Australia Limited was registered as a public company on 7 September 2007. CareFlight Limited and CareFlight (QLD) Limited hold one share each. This is an equity accounted associate.
b) CareFlight (NT) Limited was registered as a public company limited by guarantee on 17 June 2011. CareFlight Limited is the sole member of CareFlight (NT) Limited. CareFlight (NT) Limited is accounted for as a wholly-owned subsidiary of CareFlight Limited.
c) CareFlight Aero-medical Limited was registered as a public company limited by guarantee on 6 November 2012. The members of CareFlight Aero-medical Limited are CareFlight Limited and CareFlight (QLD) Limited. This is an equity accounted associate.
12. Fixed wing aircraft held for sale
King Air B200 - VH-ZXM 12 a) 766,782 - 766,782 -
a) King Air B200-VH-ZXM was used to service the implementation phase of the Top End Aero-Medical Contract
until 31 December 2012. This aircraft is classified as a current asset as the Company has placed the aircraft forsale in the market. The aircraft is stated at the sale price, offered by an interested purchaser, of USD 795,000 converted to Australian currency at the exchange rate at year end which was AUD 1 = USD 1.0368. On 6 June 2013, this purchaser withdrew from the sale process and the aircraft remains held for sale. Impairment loss of$411,694 in respect of this aircraft has been calculated as the difference between its carrying amount and offered sale price and is recognised in the statement of surplus or deficit and other comprehensive income.
13. Other current assets Prepayments 1,019,631 612,073
1,019,631 612,073
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VH-Z
CY
VH-Z
MQ
VH
-ZXM
VH
-ZC
I VH
-ZC
J VH
-ZC
N
VH-Z
CO
To
tal
$
$ $
$ $
$ $
$ $
Cos
t
B
alan
ce a
t 1 M
ay 2
011
1,
273,
047
- -
- -
- -
- 1,
273,
047
Acqu
isiti
on
34
7,63
2 1,
787,
518
1,21
4,59
3 1,
517,
697
4,21
7,78
0 3,
615,
247
4,02
6,34
5 4,
016,
017
20,7
42,8
29B
alan
ce a
t 30
Apr
il 20
12
1,
620,
679
1,78
7,51
8 1,
214,
593
1,51
7,69
7 4,
217,
780
3,61
5,24
7 4,
026,
345
4,01
6,01
7 22
,015
,876
Bala
nce
at 1
May
201
2
1,62
0,67
91,
787,
518
1,21
4,59
31,
517,
697
4,21
7,78
03,
615,
247
4,02
6,34
54,
016,
017
22,0
15,8
76Ac
quis
ition
--
--
1,09
7,61
11,
380,
316
1,37
8,92
31,
323,
632
5,18
0,48
2D
ispo
sals
--
(1,2
14,5
93)
--
--
(1,2
14,5
93)
Tran
sfer
to a
ircra
ft he
ld fo
r sal
e 12
-
--
(1,5
17,6
97)
--
--
(1,5
17,6
97)
Bal
ance
at 3
0 A
pril
2013
1,62
0,67
91,
787,
518
--
5,31
5,39
14,
995,
563
5,40
5,26
85,
339,
649
24,4
64,0
68
Acc
umul
ated
Dep
reci
atio
n
B
alan
ce a
t 1 M
ay 2
011
- -
- -
- -
- -
-D
epre
ciat
ion
for t
he y
ear
224,
922
131,
333
111,
342
147,
191
- -
- -
614,
788
Bal
ance
at 3
0 A
pril
2012
224,
922
131,
333
111,
342
147,
191
- -
- -
614,
788
Bala
nce
at 1
May
201
222
4,92
213
1,33
311
1,34
214
7,19
1-
--
-61
4,78
8D
epre
ciat
ion
for t
he y
ear
223,
088
271,
652
142,
899
192,
030
285,
228
170,
770
199,
494
126,
322
1,61
1,48
3D
ispo
sals
--
(254
,241
)-
--
--
(254
,241
)Tr
ansf
er to
airc
raft
held
for s
ale
1
2 -
--
(339
,221
)-
--
-(3
39,2
21)
Bal
ance
at 3
0 A
pril
2013
448,
010
402,
985
--
285,
228
170,
770
199,
494
126,
322
1,63
2,80
9
Car
ryin
g am
ount
s
A
t 1 M
ay 2
011
1,
273,
047
- -
- -
- -
- 1,
273,
047
At 3
0 Ap
ril 2
012
1,
395,
757
1,65
6,18
5 1,
103,
251
1,37
0,50
6 4,
217,
780
3,61
5,24
7 4,
026,
345
4,01
6,01
7 21
,401
,088
At 1
May
201
2
1,39
5,75
71,
656,
185
1,10
3,25
11,
370,
506
4,21
7,78
03,
615,
247
4,02
6,34
54,
016,
017
21,4
01,0
88At
30
April
201
3
1,17
2,66
91,
384,
533
--
5,03
0,16
34,
824,
793
5,20
5,77
45,
213,
327
22,8
31,2
59
Impa
ct o
f cha
nge
in a
ccou
ntin
g po
licie
s In
201
3, th
e G
roup
cha
nged
its
acco
untin
g po
licy
for v
alui
ng fi
xed
win
g ai
rcra
ft fro
m fa
ir va
lue
basi
s to
cos
t bas
is (r
efer
not
e 3
d) (v
)). In
201
3 th
e G
roup
als
o ch
ange
d its
pol
icy
for
depr
ecia
ting
fixed
win
g ai
rcra
ft, w
hich
resu
lted
in d
isag
greg
atin
g th
e fix
ed w
ing
airc
raft
into
airf
ram
e an
d en
gine
com
pone
nts
(refe
r not
e 3
d) (i
ii)).
2012
bal
ance
s fo
r fix
ed w
ing
airc
raft
wer
e w
ritte
n do
wn
by $
758,
380
to re
flect
the
chan
ge in
acc
ount
ing
polic
ies.
Thi
s w
rite
dow
n w
as re
cord
ed a
s fo
llow
s:
2012
20
12 re
stat
ed
Adj
ustm
ent
Net
sur
plus
for t
he y
ear
251,
160
201,
343
(49,
817)
D
eval
uatio
n w
ritte
n of
f to
stat
emen
t of s
urpl
us/d
efic
it an
d ot
her c
ompr
ehen
sive
inco
me
- (6
97,8
92)
(697
,892
) R
eval
uatio
n re
serv
e 10
,671
-
(10,
671)
N
et im
pact
75
8,38
0
CA
REF
LIG
HT
LIM
ITED
Pag
e 30
15.
R
otar
y W
ing
Airc
raft
Con
solid
ated
Not
e
A
gust
a A
109
Pow
er
V
H-Z
CF
Leas
ed
Kaw
asak
i BK
117
V
H-IM
E Le
ased
Tot
al
At V
alua
tion
$
$
$
Ba
lanc
e at
1 M
ay 2
011
2,
844,
037
2,43
1,19
3 5,
275,
230
Acqu
isiti
on
-
862,
505
862,
505
Dep
reci
atio
n fo
r the
yea
r
(218
,772
) (1
93,7
52)
(412
,524
)R
eval
uatio
n in
crem
ent/(
decr
emen
t) 15
a),
b)
(152
,291
) (6
10,8
82)
(763
,173
)B
alan
ce a
t 30
Apr
il 20
12
2,
472,
974
2,48
9,06
4 4,
962,
038
Bala
nce
at 1
May
201
2
2,47
2,97
42,
489,
064
4,96
2,03
8D
epre
ciat
ion
for t
he y
ear
(2
06,0
81)
(155
,567
)(3
61,6
48)
Rev
alua
tion
incr
emen
t/(de
crem
ent)
15 a
), b)
(1
52,2
13)
386,
503
234,
290
Bal
ance
at 3
0 A
pril
2013
2,11
4,68
02,
720,
000
4,83
4,68
0
Car
ryin
g am
ount
s
A
t 1 M
ay 2
011
2,
844,
037
2,43
1,19
3 5,
275,
230
At 3
0 Ap
ril 2
012
2,
472,
974
2,48
9,06
4 4,
962,
038
At 1
May
201
2
2,47
2,97
42,
489,
064
4,96
2,03
8At
30
April
201
3
2,11
4,68
02,
720,
000
4,83
4,68
0
a)
Agu
sta
A10
9 Po
wer
VH
-ZC
F H
elic
opte
r
Dire
ctor
s’ v
alua
tion
of h
elic
opte
r VH
-ZC
F at
30
April
201
3 is
bas
ed o
n a
valu
atio
n by
Hel
iflite
Pty
Lim
ited,
the
dist
ribut
ors
of th
ese
helic
opte
rs in
Aus
tralia
(dire
ctor
s’ v
alua
tion
at 3
0 Ap
ril 2
012
was
like
wis
e ba
sed
on a
val
uatio
n by
Hel
iflite
Pty
Lim
ited)
. The
hel
icop
ter i
s va
lued
in U
S D
olla
rs a
nd is
con
verte
d to
Aus
tralia
n cu
rrenc
y at
the
exch
ange
rate
at y
ear e
nd
whi
ch w
as A
UD
1 =
US
D 1
.036
8 (2
012:
AU
D 1
= U
SD
1.0
453)
. In
acco
rdan
ce w
ith s
igni
fican
t acc
ount
ing
polic
ies
(Not
e 3
d) (v
)), to
tal r
eval
uatio
n de
crem
ent f
or 2
013
amou
nted
to
$152
,213
(201
2: re
valu
atio
n de
crem
ent o
f $15
2,29
1).
b)
Kaw
asak
iBK
117
VH-IM
E H
elic
opte
r
Dire
ctor
s’ v
alua
tion
of h
elic
opte
r VH
-IME
at 3
0 Ap
ril 2
013
is b
ased
on
a va
luat
ion
by S
latte
ry V
alua
tions
Pty
Lim
ited
(dire
ctor
s’ v
alua
tion
at 3
0 Ap
ril 2
012
was
like
wis
e ba
sed
on a
va
luat
ion
by S
latte
ry V
alua
tions
Pty
Lim
ited)
. In
acco
rdan
ce w
ith s
igni
fican
t acc
ount
ing
polic
ies
(Not
e 3
d) (v
)), to
tal r
eval
uatio
n in
crem
ent f
or 2
013
amou
nted
to $
386,
503
(201
2:
reva
luat
ion
decr
emen
t of $
610,
882)
.
CA
REF
LIG
HT
LIM
ITED
Pag
e 31
16.
Land
and
bui
ldin
gs
Con
solid
ated
4
Bar
den
Stre
et
Nor
thm
ead
Ow
ned
50 B
eam
ish
Stre
etN
orth
mea
d Le
ased
Tota
l
$
$
$
Cos
t
Bala
nce
at 1
May
201
1 2,
200,
000
- 2,
200,
000
Acq
uisi
tions
- 52
8,99
6 52
8,99
6 B
alan
ce a
t 30
Apr
il 20
12
2,20
0,00
0 52
8,99
6 2,
728,
996
Ba
lanc
e at
1 M
ay 2
012
2,20
0,00
052
8,99
62,
728,
996
Acq
uisi
tions
-54
,262
54,2
62B
alan
ce a
t 30
Apr
il 20
13
2,20
0,00
058
3,25
82,
783,
258
Acc
umul
ated
Dep
reci
atio
n
Bala
nce
at 1
May
201
1 76
,778
-
76,7
78
Dep
reci
atio
n fo
r the
yea
r 41
,500
1,
562
43,0
62
Bal
ance
at 3
0 A
pril
2012
11
8,27
8 1,
562
119,
840
Ba
lanc
e at
1 M
ay 2
012
118,
278
1,56
211
9,84
0D
epre
ciat
ion
for t
he y
ear
119,
230
4,57
512
3,80
5B
alan
ce a
t 30
Apr
il 20
13
237,
508
6,13
724
3,64
5
Car
ryin
g am
ount
s
At 1
May
201
1 2,
123,
222
- 2,
123,
222
At 3
0 Ap
ril 2
012
2,08
1,72
2 52
7,43
4 2,
609,
156
A
t 1 M
ay 2
012
2,08
1,72
252
7,43
42,
609,
156
At 3
0 Ap
ril 2
013
1,96
2,49
257
7,12
12,
539,
613
CA
REF
LIG
HT
LIM
ITED
Pag
e 32
17.
Prop
erty
, pla
nt a
nd e
quip
men
t C
onso
lidat
ed
Han
gar f
acili
ties
Ow
ned
Oth
er p
lant
and
eq
uipm
ent
Ow
ned
Oth
er p
lant
and
eq
uipm
ent
Leas
ed
Tota
l
$
$ $
$ C
ost
Bala
nce
at 1
May
201
1 30
5,36
3 5,
811,
979
953,
475
7,07
0,81
7A
cqui
sitio
ns
44
6,63
5 1,
727,
320
871,
914
3,04
5,86
9Le
ased
ass
ets
capi
talis
ed
- 49
3,65
8 (4
93,6
58)
-D
ispo
sals
- (6
4,99
0)
(397
,677
) (4
62,6
67)
Bal
ance
at 3
0 A
pril
2012
75
1,99
8 7,
967,
967
934,
054
9,65
4,01
9
Bala
nce
at 1
May
201
2 75
1,99
87,
967,
967
934,
054
9,65
4,01
9A
cqui
sitio
ns28
2,44
31,
044,
202
1,11
1,98
32,
438,
628
Leas
ed a
sset
s ca
pita
lised
-
348,
542
(348
,542
)-
Dis
posa
ls-
(860
,074
)(5
85,5
12)
(1,4
45,5
86)
Bal
ance
at 3
0 A
pril
2013
1,
034,
441
8,50
0,63
71,
111,
983
10,6
47,0
61
Acc
umul
ated
Dep
reci
atio
n
Bala
nce
at 1
May
201
1 76
,296
3,
616,
637
104,
544
3,79
7,47
7D
epre
ciat
ion
for t
he y
ear
10,5
18
905,
294
201,
424
1,11
7,23
6D
ispo
sals
-
(16,
398)
(1
92,2
90)
(208
,688
)B
alan
ce a
t 30
Apr
il 20
12
86,8
14
4,50
5,53
3 11
3,67
8 4,
706,
025
Bala
nce
at 1
May
201
2 86
,814
4,50
5,53
311
3,67
84,
706,
025
Dep
reci
atio
n fo
r the
yea
r 21
,312
1,00
9,21
522
7,64
71,
258,
174
Impa
irmen
t-
15,5
08-
15,5
08D
ispo
sals
-(5
39,5
95)
(219
,601
)(7
59,1
96)
Bal
ance
at 3
0 A
pril
2013
10
8,12
64,
990,
661
121,
724
5,22
0,51
1
C
arry
ing
amou
nts
A
t 1 M
ay 2
011
229,
067
2,19
5,34
2 84
8,93
1 3,
273,
340
At 3
0 Ap
ril 2
012
665,
184
3,46
2,43
4 82
0,37
6 4,
947,
994
At 1
May
201
2 66
5,18
43,
462,
434
820,
376
4,94
7,99
4At
30
April
201
3 92
6,31
53,
509,
976
990,
259
5,42
6,55
0
CAREFLIGHT LIMITED
Page 33
Note Consolidated 2013 2012 $ $ 18. Trade and other payables
Current Trade creditors 2,768,182 2,361,733 Other payables and accrued expenses 2,003,179 1,624,375 Income received in advance - restricted funds 72,140 435,384
- unrestricted sponsorship income received in advance 266,667 166,666 - deferred revenue 4,521,109 4,552,397
9,631,277 9,140,555
The Group’s exposure to market and liquidity risk related to payables is discussed in Note 23.
19. Interest bearing liabilities
Current
Hire purchase and lease liabilities 4,901,106 2,466,004
Non-current Hire purchase and lease liabilities 23,758,566 23,083,736 Financing arrangements The Group’s hire purchase and lease liabilities of $28,659,672 (2012: $25,549,740) are secured by the leased assets and, in the event of default, the assets revert to the financier.
20. Provisions
Current
Liability for annual leave 1,793,316 1,524,850 Liability for long service leave 216,305 174,013
26 2,009,621 1,698,863 Non-current Liability for long service leave 26 353,191 273,250
21. Reserves
Asset revaluation reserveat 1 May
- -
Revaluation increment 15 234,290 - Asset revaluation reserve at 30 April
234,290 -
22. Retained surplus
Retained surplus at 1 May 6,816,676 7,313,225 Net surplus for the year 859,439 201,343 Devaluation decrement 15 - (697,892) Retained surplus at 30 April 7,676,115 6,816,676
CAREFLIGHT LIMITED
Page 34
23. Financial instruments
a) Credit risk
The Group has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis. Credit evaluations are performed on all customers requiring credit over a certain amount. The Group does not require collateral in respect of financial assets.
Interest earning investments are placed only in bank bills and term deposits. At the reporting date there were no significant concentrations of credit risk.
Exposure to credit risk
The maximum exposure to credit risk for receivables at the reporting date by geographic region was:
Consolidated Note Carrying amount
2013 2012 $ $
Australia 7,324,515 2,256,880 Asia Pacific 54,632 203,635 Europe 68,238 44,745 9 7,447,385 2,505,260
Impairment losses
Gross 2013
Impairment 2013
Gross 2012
Impairment 2012
$ $ $ $
Not past due 7,223,183 - 2,270,870 - Past due 0 – 30 days 162,927 - 218,473 - Past due 31 – 60 days 61,275 - 12,931 - Past due 61 – one year - - 2,986 - More than one year - - - -
7,447,385 - 2,505,260 -
Based on historic default rates, the Group believes that no impairment allowance is necessary in respect of trade receivables.
CA
REF
LIG
HT
LIM
ITED
Pag
e 35
23.
Fina
ncia
l ins
trum
ents
(con
tinue
d)
b)
Liqu
idity
risk
The
follo
win
g ar
e th
e co
ntra
ctua
l mat
uriti
es o
f fin
anci
al li
abilit
ies
incl
udin
g es
timat
ed in
tere
st p
aym
ents
and
exc
ludi
ng th
e im
pact
of n
ettin
g ar
rang
emen
ts:
C
onso
lidat
ed
2013
Not
eC
arry
ing
amou
nt
Con
trac
tual
ca
shflo
ws
1 ye
ar o
r les
s 1-
5 ye
ars
Mor
e th
an 5
ye
ars
$$
$$
$N
on-d
eriv
ativ
e fin
anci
al li
abili
ties
Hire
pur
chas
e an
d le
ase
liabi
litie
s 19
28
,659
,672
40,2
32,6
604,
901,
106
8,22
4,11
415
,534
,452
Trad
e cr
edito
rs
18
2,76
8,18
22,
768,
182
--
-O
ther
pay
able
s an
d ac
crue
d ex
pens
es
18
2,00
3,17
92,
003,
179
--
-33
,431
,033
45,0
04,0
214,
901,
106
8,22
4,11
415
,534
,452
2012
C
arry
ing
amou
nt
Con
trac
tual
ca
shflo
ws
1 ye
ar o
r les
s 1-
5 ye
ars
Mor
e th
an 5
ye
ars
$
$ $
$ $
Non
-der
ivat
ive
finan
cial
liab
ilitie
s
H
ire p
urch
ase
and
leas
e lia
bilit
ies
19
25,5
49,7
40
32,6
17,4
43
2,46
6,00
4 12
,749
,478
10
,334
,258
Tr
ade
cred
itors
18
2,
361,
733
2,36
1,73
3 -
- -
Oth
er p
ayab
les
and
accr
ued
expe
nses
18
1,
624,
375
1,62
4,37
5 -
- -
29,5
35,8
48
36,6
03,5
51
2,46
6,00
4 12
,749
,478
10
,334
,258
CAREFLIGHT LIMITED
Page 36
23. Financial instruments (continued)
c) Currency risk
Exposure to currency risk
The exposure of the Group to currency risk at balance date was as follows, based on notional amounts:
Consolidated Note 2013 2012
AUD USD AUD USD
Rotary Wing 15 2,114,680 2,192,500 4,962,038 5,186,818 Fixed Wing 14 - - 6,284,079 6,568,747 Assets held for sale 12 766,782 795,000 - - Cash assets 172,235 178,573 657,701 687,494 Hire purchase and lease liabilities 19 (523,422) (542,684) (1,437,333) (1,502,444) Gross statement of financial position exposure 2,530,275 2,623,389 10,466,485 10,940,615
Estimated forecast purchases 1,525,622 1,581,765 7,235,346 7,563,107Gross statement of surplus or deficit and other comprehensive income exposure
1,525,622 1,581,765 7,235,346 7,563,107
The following significant exchange rates applied during the year:
Average rate Reporting date spot rate 2013 2012 2013 2012
$ $ $ $ AUD:USD 1.0260 1.0285 1.0368 1.0453
Sensitivity analysis
A 10% strengthening of the Australian dollar against the following currencies at 30 April would have increased/(decreased) capital funds and surplus/(deficit) by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant. The analysis is performed on the same basis for 2012. Consolidated
AUD Capital funds Surplus/(deficit) $ $
30 April 2013 USD (144,661) (85,365)
AUD Capital funds Surplus/(deficit) $ $
30 April 2012 USD (891,708) (59,792)
A 10% weakening of the Australian dollar against the above currencies at 30 April would have had the equal but opposite effect on the above currencies to the amounts shown above, on the basis that all other variables remain constant.
Balances captured within the capital funds are movements in rotary wing, fixed wing and hire purchase and lease liabilities exposures.
CAREFLIGHT LIMITED
Page 37
23. Financial instruments (continued)
d) Interest rate risk
The Group’s liabilities in fixed rate borrowings are exposed to a risk of change in their fair value due to changes in interest rates. Payables and investments in short-term receivables are not exposed to interest rate risk.
Profile
At the reporting date the interest rate profile of the interest bearing financial instruments of the Group was:
Consolidated Note Carrying amount
2013 2012 $ $
Fixed rate instruments Financial liabilities 19 28,659,672 25,549,740
28,659,672 25,549,740
Variable rate instruments Cash assets 8 3,467,054 6,246,432
3,467,054 6,246,432
Cash flow sensitivity analysis for variable rate instruments
A change of 100 basis points in interest rates at 30 April would have increased (decreased) capital funds and surplus/(deficit) by the amounts shown below. This analysis assumes that all other variables, in particular foreign currency rates, remain constant. The analysis is performed on the same basis for 2012.
Surplus/(deficit) Capital funds 100bp
increase 100bp
decrease 100bp
increase 100bp
decrease $ $ $ $
30 April 2013 Variable rate instruments 34,671 (34,671) - -Cash flow sensitivity (net) 34,671 (34,671) - - 30 April 2012 Variable rate instruments 35,463 (35,463) - - Cash flow sensitivity (net) 35,463 (35,463) - -
CA
REF
LIG
HT
LIM
ITED
Pag
e 38
23.
Fina
ncia
l ins
trum
ents
(con
tinue
d)
d)In
tere
st ra
te ri
sk (c
ontin
ued)
Effe
ctiv
e in
tere
st ra
tes
and
re-p
ricin
g an
alys
is
In re
spec
t of i
ncom
e ea
rnin
g fin
anci
al a
sset
s an
d in
tere
st b
earin
g fin
anci
al li
abilit
ies,
the
follo
win
g ta
bles
indi
cate
thei
r ave
rage
effe
ctiv
e in
tere
st ra
tes
at th
e re
porti
ng d
ate
and
the
perio
ds in
whi
ch th
ey m
atur
e or
, if e
arlie
r, re
-pric
e.
Con
solid
ated
2013
N
ote
Effe
ctiv
e ra
te
of in
tere
st
Floa
ting
inte
rest
rate
1
year
or l
ess
1 to
5 y
ears
M
ore
than
5
year
s N
on-in
tere
st
bear
ing
Tota
l
%
$ $
$ $
$ $
Fina
ncia
l ass
ets
Cas
h an
d ca
sh e
quiv
alen
ts
8 3.
393,
452,
297
--
-14
,757
3,46
7,05
4R
ecei
vabl
es
9 -
--
-7,
447,
385
7,44
7,38
53,
452,
297
--
-7,
462,
142
10,9
14,4
39
Fina
ncia
l lia
bilit
ies
Paya
bles
18
-
--
-9,
631,
277
9,63
1,27
7In
tere
st b
earin
g lia
bilit
ies
19
4.78
-4,
901,
106
8,22
4,11
415
,534
,452
-28
,659
,672
-4,
901,
106
8,22
4,11
415
,534
,452
9,63
31,2
7738
,290
,949
2012
N
ote
Effe
ctiv
e ra
te
of in
tere
st
Floa
ting
inte
rest
rate
1
year
or l
ess
1 to
5 y
ears
M
ore
than
5
year
s N
on-in
tere
st
bear
ing
Tota
l
%
$ $
$ $
$ $
Fina
ncia
l ass
ets
Cas
h an
d ca
sh e
quiv
alen
ts
8 0.
95
6,22
6,80
3 -
- -
19,6
29
6,24
6,43
2 R
ecei
vabl
es
9
- -
- -
2,50
5,26
0 2,
505,
260
6,
226,
803
- -
- 2,
524,
889
8,75
1,69
2
Fina
ncia
l lia
bilit
ies
Paya
bles
18
- -
- -
9,14
0,55
5 9,
140,
555
Inte
rest
bea
ring
liabi
litie
s 19
3.
27
- 2,
466,
004
12,7
49,4
78
10,3
34,2
58
- 25
,549
,740
- 2,
466,
004
12,7
49,4
78
10,3
34,2
58
9,14
0,55
5 34
,690
,295
CA
REF
LIG
HT
LIM
ITED
Pag
e 39
23.
Fina
ncia
l ins
trum
ents
(con
tinue
d)
e)
Fair
valu
es
Fair
valu
es v
ersu
s ca
rryi
ng a
mou
nts
The
fair
valu
es o
f fin
anci
al a
sset
s an
d lia
bilit
ies,
toge
ther
with
the
carry
ing
amou
nts
show
n in
the
stat
emen
t of f
inan
cial
pos
ition
, are
as
follo
ws:
Con
solid
ated
20
1320
13
2012
20
12
$$
$ $
N
ote
Car
ryin
g am
ount
Fa
ir va
lue
Car
ryin
g am
ount
Fa
ir va
lue
Cas
h as
sets
8
3,46
7,05
43,
467,
054
6,24
6,43
2 6,
246,
432
Rec
eiva
bles
9
7,44
7,38
57,
447,
385
2,50
5,26
0 2,
505,
260
Inve
stm
ents
11
1
1 1
1 O
ther
cur
rent
ass
ets
13
1,01
9,63
11,
019,
631
612,
073
612,
073
Paya
bles
18
(9
,631
,277
)(9
,631
,277
) (9
,140
,555
) (9
,140
,555
) In
tere
st b
earin
g lia
bilit
ies
19
(28,
659,
672)
(28,
659,
672)
(2
5,54
9,74
0)
(25,
549,
740)
(2
6,35
6,87
8)(2
6,35
6,87
8)
(25,
326,
529)
(2
5,32
6,52
9)
Unr
ecog
nise
d (lo
ss)/g
ain
--
--
CA
REF
LIG
HT
LIM
ITED
Pag
e 40
24.
Com
mitm
ents
Con
solid
ated
2013
20
12
N
ote
Futu
re
min
imum
leas
epa
ymen
ts
Inte
rest
Pr
esen
t va
lue
of
min
imum
leas
epa
ymen
ts
Futu
re
min
imum
leas
epa
ymen
ts
Inte
rest
Pr
esen
t va
lue
of
min
imum
leas
epa
ymen
ts
$$
$ $
$ $
Hire
pur
chas
e an
d fin
ance
leas
e co
mm
itmen
ts fo
r th
e G
roup
are
:W
ithin
one
yea
r 19
6,
808,
972
1,90
7,86
24,
901,
106
3,52
3,20
3 1,
057,
199
2,46
6,00
4 O
ne y
ear o
r lat
er a
nd n
o la
ter t
han
five
year
s 19
13
,719
,947
5,49
5,83
38,
224,
114
17,7
67,7
84
5,01
8,30
6 12
,749
,478
La
ter t
han
five
year
s 19
19
,703
,741
4,16
9,29
315
,534
,452
11
,326
,456
99
2,19
8 10
,334
,258
40
,232
,660
11,5
72,9
8828
,659
,672
32
,617
,443
7,
067,
703
25,5
49,7
40
Ope
ratin
g le
ase
com
mitm
ents
for t
he G
roup
are
:
VH-B
IF24
a)
W
ithin
one
yea
r 48
0,00
0-
480,
000
480,
000
- 48
0,00
0
VH-L
WI
24
b)
With
in o
ne y
ear
2,51
3,24
4-
2,51
3,24
4 -
- -
One
yea
r or l
ater
and
no
late
r tha
n fiv
e ye
ars
7,
958,
606
-7,
958,
606
- -
- 10
,951
,850
-10
,951
,850
48
0,00
0 -
480,
000
a)
The
oper
atin
g le
ase
for t
he B
K117
hel
icop
ter V
H-B
IF h
as e
xpire
d an
d th
e C
ompa
ny h
as n
egot
iate
d an
ext
ensi
on u
ntil
30 A
pril
2014
. Th
e C
ompa
ny is
in th
e pr
oces
s of
fo
rmal
isin
g th
is a
gree
men
t. Th
e he
licop
ter h
as b
een
depl
oyed
in S
ydne
y to
fulfi
l com
mitm
ents
und
er m
edic
al re
triev
al c
ontra
cts.
b)Th
e C
ompa
ny h
as e
nter
ed in
to a
n op
erat
ing
leas
e ag
reem
ent f
or B
ell 4
12 h
elic
opte
r VH
-LW
I, de
ploy
ed in
Syd
ney,
to fu
lfil c
omm
itmen
ts u
nder
med
ical
retri
eval
con
tract
s.
Page 41
25. Notes to the statement of cashflows
a) Reconciliation of cash
For the purposes of the statement of cashflows, cash includes cash on hand and at bank and short term deposits at call. Cash at the end of the year as shown in the statement of cashflows is reconciled to the related items in the statement of financial position as follows:
Consolidated
Note 2013 2012
Cash on hand 14,757 19,629 Cash at bank 3,452,297 6,226,803
8 3,467,054 6,246,432
b) Reconciliation of cashflow from operating activities
Net surplus for the period 859,439 201,343
Add items classified as investing/financing activities:
Net loss on sale of non-current assets 162,504 14,362
Add non-cash items:
Depreciation 3,355,110 2,143,777 Impairment loss on non-current assets 15,508 - Impairment loss on fixed wing aircraft held for sale 411,694 - Operating surplus before changes in working capital and provisions 4,804,255 2,359,482 (Increase)/decrease in trade and other receivables (4,942,125) 1,730,118 (Increase)/decrease in inventories (36,169) (31,833) (Increase)/decrease in other current assets (407,558) 138,701 Increase/(decrease) in trade and other payables 490,722 2,100,944 Increase/(decrease) in provisions 390,699 608,847 Net cash from operating activities 299,824 6,950,092
Page 42
Consolidated 2013 2012
$ $ 26. Employee benefits
Aggregate liability for employee entitlements including on-costs: Current 2,009,621 1,698,863 Non-current 353,191 273,250
2,362,812 1,972,113 Number of employeesNumber of employees at year end 173 152
Superannuation commitment
The Group was under a legal obligation during the year to contribute 9% of each employee’s base salary to a superannuation fund nominated by each employee.
Types of benefits
The superannuation funds provide benefits which represent the accumulation of contributions to employees, providing lump sum or annuity benefits upon retirement, death or disability.
Consolidated Contributions 2013 2012
$ $ Details of contributions during the year are as follows: Employer contributions to the funds 1,990,629 1,608,357
27. Related party disclosure
The following were key management personnel of the Group at any time during the reporting period.
Non-executive directors Executive directors
Sean BEEHAN Ian BADHAM – Media Relations Manager
David BOWEN Derek COLENBRANDER – Chief Executive Officer
Daniel CASS
Garry DINNIE
Anna GUILLAN
Andrew REFSHAUGE
Other executives
Andrew ANDERSON – General Manager Medical & Support Services
Luke BRADSHAW – Director of Engineering
Alan GARNER – Medical Director
Don KEMBLE – Manager Communications & Engagement
Jeff KONEMANN – Chief Pilot until 28 November 2012
David MANN – General Manager Aviation Services & Northern Operations�
Trent OSBORN – Head of Fundraising
Richard Sanford - Chief Pilot from 29 November 2012
Paul SMITH – National Manager CareFlight International
Rajini SURENDRAN – Finance Manager
Page 43
27. Related party disclosure (continued)
a) Transactions with key management personnel
Consolidated 2013 2012
$ $ Short term employee benefits 2,141,759 2,071,073 Long term employee benefits 185,370 179,915
2,327,129 2,250,988
b) Loans and other transactions with key management personnel
Dr Andrew Refshauge, Chairman of the Board, received an allowance in recognition of the time he commits to the affairs of the Group above and beyond the normal role of a board chairman. He was paid $60,000 (2012: $60,000) for these services under normal market rates.
Garry Dinnie, non-executive director and Chair of the Audit & Risk Committee, received an allowance in recognition of the time he commits to the affairs of the Group above and beyond the normal role of chairman of a board committee. He was paid $29,500 (2012: $30,000) for these services under normal market rates.
David Bowen, non-executive director, provided consultancy services to the Group. He was paid $1,050 (2012: $9,640) for these services under normal market rates.
Paul Smith, National Manager CareFlight International, purchased a motor vehicle from the Company for $21,000 on normal commercial terms.
c) Other related party transactions
Peter Quayle, a member of the Company, provided company secretarial services to the Group. He was paid $39,462 (2012: $37,061) for these services under normal market rates.
Heidi Colenbrander, wife of Derek Colenbrander, Chief Executive Officer provided design and communication services to the Group. She was paid $34,000 (2012: $20,100) for these services under normal market rates.
Max Mann, father of David Mann, General Manager Aviation Services & Northern Operations provided engineering support services to the Group. He was paid $25,000 (2012: $22,219) for these services under normal market rates.
28. Economic dependency
The Group has continuing financial support from the NT Government, NSW Government, sponsors and the community.
29. Events subsequent to reporting date
There has not arisen in the interval between the end of the financial year and the date of this report any item, transaction or event of a material or unusual nature likely, in the opinion of the Directors of the Company, to affect significantly the operations of the Company, the results of those operations, or the state of affairs of the Company, in future financial years.
30. Registered charity
The Company is an authorised fundraiser under the provisions of the Charitable Fundraising Act 1991 (NSW), the Fundraising Act 1998 (VIC), the Charitable Collections Act 2003 (ACT), the Collections for Charities Act 2001 (TAS), the Collections for Charitable Purposes Act 1939 (SA) and the Charitable Collections Act 1946 (WA).
Page 44
31. Information and declaration to be furnished under the Charitable Fundraising Act 1991 (NSW), the Fundraising Act 1998 (VIC), the Charitable Collections Act 2003 (ACT), the Collections for Charities Act 2001 (TAS), the Collections for Charitable Purposes Act 1939 (SA) and the Charitable Collections Act 1946 (WA).
Fundraising appeals conducted by the Company:
� Christmas
� Taxation
� Newsletter
� Corporate
These appeals are used to continue the Group’s role of providing rapid response critical care services.
Page 45
Consolidated
2013 2012 32. Statement of income and expenditure $ $
Fundraising Donations and sponsorship revenue Bequests 843,175 505,088 Corporate and general donations 3,044,463 2,316,770 Appeals 1,398,817 1,357,273 Sponsorship 1,352,727 1,120,159 Gross revenue - donations and sponsorship 6,639,182 5,299,290
Donations and sponsorship expenditure Bequests - 2,000 Corporate and general donations 392,319 266,815 Appeals 590,620 424,851 Sponsorship - 3,960 Total expenditure - donations and sponsorship 982,939 697,626
Net surplus - donations and sponsorship 5,656,243 4,601,664
Merchandising and events revenue Bear merchandising 6,059,964 6,150,772 Events 1,204,032 1,480,282 Gross revenue - merchandising and events 7,263,996 7,631,054
Merchandising and events expenditure Bear merchandising 4,314,026 4,464,773 Events 724,644 1,002,672 Total expenditure - merchandising and events 5,038,670 5,467,445
Net surplus - merchandising and events 2,225,326 2,163,609
Total revenue - fundraising 13,903,178 12,930,344 Total expenditure - fundraising 6,021,609 6,165,071 Net surplus - fundraising 7,881,569 6,765,273
Other revenue Ambulance Service of NSW 6,375,333 3,200,558 Northern Territory Department of Health 31,355,803 28,086,819 Aero-medical and other retrieval revenue 12,716,848 15,076,526 Finance income 122,384 158,318
50,570,368 46,522,221
Other expenditure Operations and administration - costs of personnel 29,597,027 24,998,561 Direct costs of medical and aircraft retrieval 17,492,611 20,200,015 Depreciation 3,355,110 2,187,610 Insurance 962,601 649,690 Professional fees 1,520,487 1,730,954 General overheads 2,705,269 2,458,008 Exchange rate loss - 12,008 Finance expense 1,369,687 834,943 Impairment loss on non-current assets 15,508 - Impairment loss on fixed wing aircraft held for sale 411,694 - Net loss on sale of non-current assets 162,504 14,362
57,592,498 53,086,151
Total revenue 64,473,546 59,452,565
Total expenditure 63,614,107 59,251,222
Net surplus for the year transferred to retained surplus 859,439 201,343
Page 46
33. Statement showing how funds received from fundraising appeals were applied to charitable purposes Consolidated
2013 2012 $ $
Net surplus from fundraising 7,881,569 6,765,273 This was applied to the charitable purposes in the following manner:
Expenditure on general operating and administration costs 7,881,569 6,765,273 Total other expenditure 57,592,498 53,086,151 Less: Net surplus from fundraising 7,881,569 6,765,273 Shortfall 49,710,929 46,320,878
Shortfall of $49,710,929 (2012: $46,320,878) was provided from the following sources:
Ambulance Service of NSW 6,375,333 3,200,558 Northern Territory Department of Health 31,355,803 28,086,819
Aero-medical and other retrieval revenue 12,716,848 15,076,526 Finance income 122,384 158,318
50,570,368 46,522,221 Less: Shortfall between surplus available from fundraising appeals
conducted and total expenditure 49,710,929 46,320,878 Net surplus 859,439 201,343
34. Details of gross income and aggregate expenditure of appeals conducted jointly with traders
Gross income 6,909,944 7,146,934
Total expenditure incurred 4,911,143 5,215,358
35. Comparisons of certain monetary figures and percentages Consolidated
2013$
2013%
2012$
2012%
Costs of procuring donations and sponsorship /Gross revenue from donations and sponsorship
982,939/6,639,182 15
697,626/5,299,290 13
Costs of merchandising and events /Gross revenue from merchandising and events
5,038,670/7,263,996 69 5,467,445/
7,631,054 72
Total costs of fundraising / Gross revenue from fundraising
6,021,609/13,903,178 43 6,165,071/
12,930,344 48
Net surplus from fundraising / Gross revenue from fundraising
7,881,569/13,903,178 57 6,765,273/
12,930,344 52
Total costs of services / Total expenditure
47,089,638/63,614,107 74
45,198,576/59,251,222 76
Total costs of services / Total revenue
47,089,638/64,473,546 73
45,198,576/59,452,565 76
Page 47
36. Parent entity disclosures
As at, and throughout, the financial year ending 30 April 2013 the parent entity of the Group was CareFlight Limited.
Result of parent entity 2013 2012
$ $ Surplus for the period 2,138,313 201,343
Other comprehensive income 234,290 (697,892)
Total comprehensive income for the period 2,372,603 (496,549)
Financial position of parent entity at year end
Current assets
Total assets
Current liabilities
Total liabilities
Total equity of the parent entity comprising of:
Reserves
Retained earnings
14,040,824
29,398,869
15,633,245
20,209,590
234,290
8,954,989
9,558,808
43,479,084
13,305,422
36,662,408
-
6,816,6769,189,279 6,816,676
As the sole member of CareFlight (NT) Limited, the parent entity has provided a letter of financial support to CareFlight (NT) Limited, undertaking to provide ongoing financial support as required by the company to ensure that it continues as a going concern for at least 12 months from the date of signing of the 2013 Annual Financial Report.